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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-1097
OKLAHOMA GAS AND ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Oklahoma 73-0382390
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 North Robinson
P. O. Box 321
Oklahoma City, Oklahoma 73101-0321
(Address of principal executive offices)
(Zip Code)
405-553-3000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
-------- --------
There were 40,370,936 Shares of Common Stock, par value $2.50 per share,
outstanding as of April 30, 1996.
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<TABLE>
<CAPTION>
OKLAHOMA GAS AND ELECTRIC COMPANY
PART I. FINANCIAL INFORMATION
Item 1 FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
3 Months Ended
March 31
1996 1995
---------- ----------
(dollars in thousands except per share data)
<S> <C> <C>
OPERATING REVENUES:
Electric utility ............................ $ 233,826 $ 214,876
Non-utility subsidiary ...................... 44,226 31,640
---------- ----------
Total operating revenues ................. 278,052 246,516
OPERATING EXPENSES:
Fuel ........................................ 59,580 48,772
Purchased power ............................. 56,649 53,583
Gas purchased for resale .................... 29,287 20,091
Other operation ............................. 56,839 55,591
Maintenance ................................. 14,194 9,702
Depreciation and amortization ............... 33,470 32,221
Current income taxes ........................ 928 (1,833)
Deferred income taxes, net .................. (1,098) 63
Deferred investment tax credits, net ........ (1,287) (1,287)
Taxes other than income ..................... 12,273 11,205
---------- ----------
Total operating expenses ................. 260,835 228,108
---------- ----------
OPERATING INCOME ................................ 17,217 18,408
---------- ----------
OTHER INCOME AND DEDUCTIONS:
Interest income ............................. 511 1,587
Other ....................................... (317) (1,485)
---------- ----------
Net other income and deductions .......... 194 102
---------- ----------
INTEREST CHARGES:
Interest on long-term debt .................. 15,599 16,250
Allowance for borrowed funds used
during construction ....................... (187) (464)
Other ....................................... 1,461 3,585
---------- ----------
Total interest charges, net .............. 16,873 19,371
---------- ----------
NET INCOME (LOSS) ............................... 538 (861)
PREFERRED DIVIDEND REQUIREMENTS ................. 579 579
---------- ----------
LOSS AVAILABLE FOR COMMON ....................... $ (41) $ (1,440)
========== ==========
AVERAGE COMMON SHARES OUTSTANDING (thousands) ... 40,371 40,354
LOSS PER AVERAGE COMMON SHARE ................... $ 0.00 $ (0.04)
========== ==========
DIVIDENDS DECLARED PER SHARE .................... $ 0.66 1/2 $ 0.66 1/2
The accompanying Notes to Consolidated Financial Statements are an integral part hereof.
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31 December 31
1996 1995
------------ ------------
(dollars in thousands)
<S> <C> <C>
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
In service.......................................... $ 3,908,070 $ 3,898,829
Construction work in progress....................... 30,007 29,705
------------ ------------
Total property, plant and equipment............... 3,938,077 3,928,534
Less accumulated depreciation.................. 1,608,738 1,585,274
------------ ------------
Net property, plant and equipment................... 2,329,339 2,343,260
------------ ------------
OTHER PROPERTY AND INVESTMENTS, at cost............... 9,950 9,943
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents........................... 12,540 5,420
Accounts receivable - customers, net................ 111,997 126,273
Accrued unbilled revenues........................... 39,600 43,550
Accounts receivable - other......................... 9,650 9,152
Fuel inventories, at LIFO cost...................... 59,447 60,356
Materials and supplies, at average cost............. 21,715 22,996
Prepayments and other............................... 6,920 4,535
Accumulated deferred tax assets..................... 9,640 10,759
------------ ------------
Total current assets.............................. 271,509 283,041
------------ ------------
DEFERRED CHARGES:
Advance payments for gas............................ 6,500 6,500
Income taxes recoverable through future rates....... 40,734 41,934
Other............................................... 69,102 70,193
------------ ------------
Total deferred charges............................ 116,336 118,627
------------ ------------
TOTAL ASSETS.......................................... $ 2,727,134 $ 2,754,871
============ ============
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common stock and retained earnings.................. $ 910,551 $ 937,535
Cumulative preferred stock.......................... 49,939 49,939
Long-term debt...................................... 828,967 843,862
------------ ------------
Total capitalization.............................. 1,789,457 1,831,336
------------ ------------
CURRENT LIABILITIES:
Short-term debt..................................... 79,900 67,600
Accounts payable.................................... 77,422 72,089
Dividends payable................................... 27,425 27,427
Customers' deposits................................. 22,289 21,920
Accrued taxes....................................... 17,384 27,937
Accrued interest.................................... 16,590 19,144
Long-term debt due within one year.................. 15,000 ---
Provision for rate refund........................... 2,650 2,650
Other............................................... 30,047 33,388
------------ ------------
Total current liabilities......................... 288,707 272,155
------------- ------------
DEFERRED CREDITS AND OTHER LIABILITIES:
Accrued pension and benefit obligation.............. 70,893 67,350
Accumulated deferred income taxes................... 481,772 485,078
Accumulated deferred investment tax credits......... 81,890 83,178
Other............................................... 14,415 15,774
------------ ------------
Total deferred credits and other liabilities...... 648,970 651,380
------------ ------------
COMMITMENTS AND CONTINGENCIES......................... --- ---
------------ ------------
TOTAL CAPITALIZATION AND LIABILITIES.................. $ 2,727,134 $ 2,754,871
============ ============
The accompanying Notes to Consolidated Financial Statements are an integral part hereof.
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
3 Months Ended
March 31
1996 1995
---------- -----------
(dollars in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)........................................... $ 538 $ (861)
Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided From Operating Activities:
Depreciation and amortization............................ 33,470 32,221
Deferred income taxes and investment tax credits, net.... (2,385) (1,224)
Change in Certain Current Assets and Liabilities:
Accounts receivable - customers........................ 14,276 23,706
Accrued unbilled revenues.............................. 3,950 1,000
Fuel, materials and supplies inventories............... 2,190 (26)
Accumulated deferred tax assets........................ 1,119 4,054
Other current assets................................... (2,883) (4,364)
Accounts payable....................................... 5,028 269
Accrued taxes.......................................... (10,553) (11,429)
Accrued interest....................................... (2,554) (9,783)
Accumulated provision for rate refund.................. --- (970)
Other current liabilities.............................. (2,974) (4,215)
Other operating activities............................... 4,702 8,970
---------- -----------
Net cash provided from operating activities........... 43,924 37,348
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures..................................... (21,679) (28,656)
---------- -----------
Net cash used in investing activities................. (21,679) (28,656)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt, net...................................... --- (25,850)
Short-term debt, net..................................... 12,300 48,450
Cash dividends declared on preferred stock............... (579) (579)
Cash dividends declared on common stock.................. (26,846) (26,836)
---------- -----------
Net cash used in financing activities................. (15,125) (4,815)
---------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS..................... 7,120 3,877
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.............. 5,420 2,455
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................... $ 12,540 $ 6,332
========== ===========
- ---------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Period for:
Interest (net of amount capitalized)....................... $ 18,253 $ 26,488
Income taxes............................................... $ 4,613 $ 3,835
- ---------------------------------------------------------------------------------------------
DISCLOSURE OF ACCOUNTING POLICY:
For purposes of these statements, the Company considers all highly liquid debt
instruments purchased with a maturity of three months or less to be cash
equivalents. These investments are carried at cost which approximates market.
The accompanying Notes to Consolidated Financial Statements are an integral part hereof.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The condensed consolidated financial statements included herein have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations; however, the Company believes that the disclosures are
adequate to make the information presented not misleading. In the
opinion of the Company, all adjustments necessary to present fairly
the financial position of Oklahoma Gas and Electric Company and its
subsidiary as of March 31, 1996, and December 31, 1995, and the
results of operations and the changes in cash flows for the periods
ended March 31, 1996, and March 31, 1995, have been included and are
of a normal recurring nature (excluding amortization of a regulatory
asset relating to a Voluntary Early Retirement Package ("VERP") and
severance package - See Item 2 "Management's Discussion and Analysis
of Financial Condition and Results of Operations" for related
discussion).
The results of operations for such interim periods are not necessarily
indicative of the results for the full year. It is suggested that
these condensed consolidated financial statements be read in
conjunction with the consolidated financial statements and the notes
thereto included in the Company's Form 10-K for the year ended
December 31, 1995.
2. In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of." Adoption of SFAS No. 121 is required for
fiscal years beginning after December 15, 1995. The Company adopted
this new standard effective January 1, 1996, and the adoption of the
standard did not have a material impact on its consolidated financial
position or results of operations.
3. In October 1995 the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation." The Company has elected to continue to
measure stock compensation cost as prescribed by APB Opinion No. 25,
"Accounting for Stock Issued to Employees" and will make the
appropriate annual pro forma disclosures of net income and earnings.
<PAGE>
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
The following discussion and analysis presents factors which affected
the results of operations for the three months ended March 31, 1996 (the
"current period"), and the financial position as of March 31, 1996, of Oklahoma
Gas and Electric Company ("OG&E") and its wholly-owned non-utility subsidiary,
Enogex Inc. and its subsidiaries ("Enogex") (collectively, the "Company"). For
the three months ended March 31, 1996, approximately 84 percent of the Company's
revenues consisted of regulated sales of electricity as a public utility, while
the remaining 16 percent was provided by the non-utility operations of Enogex.
Revenues from sales of electricity are somewhat seasonal, with a large portion
of the Company's annual electric revenues occurring during the summer months
when the electricity needs of its customers increase. Enogex's primary
operations consist of transporting natural gas through its intra-state pipeline
to various customers (including OG&E), marketing (buying and selling) natural
gas to third parties, selling natural gas liquids extracted by its natural gas
processing plants and investing in natural gas exploration and production
activities. Actions of the regulatory commissions that set OG&E's electric rates
will continue to affect the Company's financial results. Unless indicated
otherwise, all comparisons are with the corresponding period of the prior year.
As reported in the Company's Form 10-K for the year ended December 31,
1995, the Company restructured and redesigned its operations in 1994 to reduce
costs in order to more favorably position itself for the competitive electric
utility environment. As part of this process, the Company implemented a
Voluntary Early Retirement Package ("VERP") and a severance package in 1994.
These two packages reduced the Company's workforce by approximately 900
employees.
In January 1995, OG&E began amortizing a regulatory asset of $48.9
million consisting of the balance of the deferred costs associated with the VERP
and the severance package, in accordance with an order of the Oklahoma
Corporation Commission ("OCC") issued on October 26, 1994. The OCC order
permitted the Company to amortize the $48.9 million over 26 months and reduced
electric rates by approximately $15 million annually. At March 31, 1996, the
unamortized regulatory asset was $20.7 million, which is included on the
Consolidated Balance Sheets as Deferred Charges - Other. In 1995, the labor
savings from the VERP and severance package approximated the amortization of the
regulatory asset and the annual rate reduction of $15 million and therefore, did
not significantly impact 1995 operating results. In 1996, the labor savings are
again expected to substantially offset the amortization of the regulatory asset
and the rate reduction of $15 million.
On July 19, 1995, OG&E announced plans to create a holding company
structure with OGE Energy Corp. becoming the parent company of OG&E. At a
special meeting of shareowners on November 16, 1995, OG&E shareowners approved
the new holding company structure. Regulatory approvals are expected to be
completed, and consummation of the transaction is expected to be completed,
later in 1996. Pursuant to the transaction, OG&E's common stock will be
exchanged on a share-for-share basis for common stock of OGE Energy Corp. and
OG&E will become a subsidiary of OGE Energy Corp. As part of this corporate
restructuring, OG&E's wholly-owned subsidiary, Enogex Inc. will also become a
direct subsidiary of OGE Energy Corp. The holding company structure will provide
greater flexibility to take advantage of opportunities to develop or acquire
other businesses, providing opportunities for increased earnings in an
increasingly competitive business environment. The holding company structure
will clearly separate the Company's electric utility business from the
non-utility businesses of the other OGE Energy Corp. subsidiaries for
regulatory, capital structure and other purposes. See Part II, Item 5 -
"Unaudited Pro Forma Financial Information."
On May 2, 1996, the Company filed a Notice of Intent with the OCC
giving notice that the Company intends to file on June 17, 1996, for an annual
electric utility rate reduction of $15.6 million. This review of OG&E's electric
utility rates should conclude no later than six months after the rate case
filing, a new requirement under Oklahoma law. See Part II, Item 1 - "Legal
Proceedings" for a discussion of the Notice of Intent.
REVENUES
Total operating revenues increased $31.5 million or 12.8 percent. This
increase was primarily attributable to increased electric sales due to a return
to more normal weather, an increase in the number of electric customers and
higher Enogex revenues.
The impact of the increase in the number of electric customers and the
return to more normal weather resulted in a 4.8 percent increase in
kilowatt-hour sales to OG&E customers ("system sales"). Sales to other utilities
increased significantly; however, sales to other utilities are at much lower
prices per kilowatt-hour and have less impact on operating revenues and earnings
than system sales.
Enogex revenues increased $12.6 million or 39.8 percent, largely due to
increased revenues from its marketing of natural gas. These increased revenues
were attributable primarily to a minimal increase in volumes sold and
significantly higher sales prices for natural gas. Revenues from Enogex's other
operations remained relatively constant.
EXPENSES
Total operating expenses increased $32.7 million or 14.3 percent
primarily due to increased fuel expense, higher prices paid by Enogex for gas
purchased for resale to third parties and increased maintenance expense.
Fuel expense increased $10.8 million in the current period due to
increased generation and temporarily shifting the fuel mix to a slightly higher
percentage of gas due to periods of extremely cold weather during minor
overhauls at coal-fired generating plants. Variances in the actual cost of fuel
used in electric generation and certain purchased power costs, as compared to
that component in cost-of-service for ratemaking, are passed through to OG&E's
electric customers through automatic fuel adjustment clauses. The automatic fuel
adjustment clauses are subject to periodic review by the OCC, the Arkansas
Public Service Commission ("APSC") and the Federal Energy Regulatory Commission
("FERC"). Enogex Inc. owns and operates a pipeline business that delivers
natural gas to the generating stations of OG&E. The OCC, the APSC and the FERC
have authority to examine the appropriateness of any gas transportation charges
or other fees OG&E pays Enogex, which OG&E seeks to recover through the fuel
adjustment clause or other tariffs. See Part II, Item 1 - "Legal Proceedings"
for a discussion of the review by the APSC of gas transportation charges paid by
OG&E to Enogex.
Enogex's gas purchased for resale pursuant to its gas marketing
operations increased $9.2 million or 45.8 percent, due to slightly higher
volumes purchased and significantly higher purchase prices.
The increase in other operation resulted primarily from costs
associated with the development of a new company-wide computer system.
Maintenance increased due to expenses associated with the Company's generating
units including: 1) material and overtime for minor overhauls at coal-fired
generating plants, 2) the use of contractors, including engineering and testing
firms and 3) repair of coal handling equipment. There was also increased
tree-trimming costs and more line work done by contract crews. Depreciation and
amortization increased due to an increase in depreciable property and higher oil
and gas production volumes (based on units of production depreciation method).
Income taxes increased primarily due to higher pre-tax earnings.
Interest expense decreased $2.5 million or 12.9 percent for the current
period. This decrease was primarily attributable to the successful refinancing
during 1995 of $299 million of long-term debt. In January 1995, OG&E refinanced
$79 million of pollution control revenue bonds (bearing a composite annual
interest rate of 6.2 percent) through the issuance of two new series of
pollution control bonds bearing interest at variable, tax-exempt rates. The
composite annualized interest rate on the new pollution control bonds was
approximately 3.9 percent for the period from their date of issuance through
March 31, 1996. In October 1995, OG&E refinanced $220 million aggregate
principal amount of first mortgage bonds (bearing a composite annual interest
rate of 8.7 percent) through the issuance of $220 million aggregate principal
amount of senior notes bearing a composite annual rate of 6.8 percent. These
refinancings resulted in a savings of approximately $2 million in the current
period.
In addition, in August and September 1995, Enogex issued $120 million
of medium-term notes at a composite interest rate of 6.89 percent. These notes
were issued to replace $90 million of short-term borrowings incurred by Enogex
in connection with refinancing medium-term notes with an annualized composite
rate of 9.99 percent, the redemption of a $6.9 million long-term note payable
which carried an interest rate of prime less one-quarter of one percent and the
redemption of $22 million of associated companies short-term borrowings.
<PAGE>
EARNINGS
The current period net income of $538,000 represents an increase of
$1.4 million in net income. Enogex's net income increased $1.2 million primarily
due to improved margins in natural gas sales. Earnings per share increased from
a four cent loss in the first quarter of 1995 to zero in the current period,
which reflects the above items and the seasonal nature of the Company's
regulated electric business.
LIQUIDITY AND CAPITAL REQUIREMENTS
The Company meets its cash needs through internally generated funds,
permanent financing and short-term borrowings. Internally generated funds and
short-term borrowings are expected to meet virtually all of the Company's
capital requirements through the remainder of 1996. Short-term borrowings will
continue to be used to meet temporary cash requirements.
The Company's primary needs for capital are related to construction of
new facilities to meet anticipated demand for utility service, to replace or
expand existing facilities in both its electric and non-utility businesses, and
to some extent, for satisfying maturing debt and sinking fund obligations.
Construction expenditures for the current period of $22 million were financed
with internally generated funds and short-term borrowings.
The Company's capital structure and cash flow remained strong
throughout the current period. The Company's combined cash and cash equivalents
increased approximately $7 million during the three months ended March 31, 1996.
The increase reflects the Company's cash flow from operations plus a modest
increase in short-term borrowings, net of construction expenditures and dividend
payments.
In April 1996, OG&E filed a registration statement for the sale of up
to $300 million of senior notes. Assuming favorable market conditions, OG&E
plans to issue all or part of the debt to refinance, at lower interest rates,
one or more series of outstanding first mortgage bonds.
Like any business, the Company is subject to numerous contingencies,
many of which are beyond its control. For discussion of significant
contingencies that could affect the Company, reference is made to Part II, Item
1 - "Legal Proceedings" of this Form 10-Q and to "Management's Discussion and
Analysis" and Notes 9 and 10 of Notes to the Consolidated Financial Statements
in the Company's 1995 Form 10-K.
<PAGE>
PART II. OTHER INFORMATION
Item 1 LEGAL PROCEEDINGS
Reference is made to Item 3 of the Company's 1995 Form 10-K for a
description of certain legal proceedings presently pending. Except as set forth
below, there are no new significant cases to report against Oklahoma Gas and
Electric Company or its subsidiary, Enogex Inc., and there have been no
significant changes in the previously reported proceedings.
On May 2, 1996, the Company filed a Notice of Intent with the OCC to
file an Application seeking to reduce its rates and charges for retail electric
service to Oklahoma jurisdiction customers in the amount of $15.6 million per
year. It is anticipated that the Application will be filed on June 17, 1996 and
represents the balance of the Oklahoma jurisdiction labor savings after the VERP
is fully amortized. The proposed effective date of the rate reduction is March
1, 1997. See Part I, Item 2 - "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for a discussion of the VERP.
The APSC is currently reviewing the amounts that OG&E pays Enogex and
recovers through its fuel adjustment clause for transporting natural gas to
OG&E's gas-fired generating stations. The ongoing dialogue between the APSC
staff and OG&E is nearing resolution and a potential refund could be made.
Management does not believe the outcome of this review will have a material
adverse effect on the Company's consolidated financial position or its results
of operations.
Item 5 OTHER INFORMATION
Unaudited Pro Forma Financial Information
- -----------------------------------------
The following unaudited pro forma financial information presents the
historical consolidated balance sheet, statement of income and retained earnings
and ratio of earnings to fixed charges of OG&E after giving effect to the
restructuring discussed in Part I, Item 2 - "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Overview", including
the transfer of Enogex Inc. and its subsidiaries to OGE Energy Corp. The
unaudited pro forma balance sheet at March 31, 1996, gives effect to the
restructuring as if it had occurred at March 31, 1996. The unaudited pro forma
statements of income and retained earnings for the period ended March 31, 1996,
gives effect to the restructuring as if it had occurred at the beginning of the
period presented. The unaudited pro forma ratio of earnings to fixed charges for
the twelve months ended March 31, 1996, gives effect to the restructuring as if
it had occurred at the beginning of the period presented.
<PAGE>
The pro forma financial information has been prepared from, and should
be read in conjunction with, the historical consolidated financial statements
and related notes thereto of OG&E in the Form 10-K for the year ended December
31, 1995 (File No. 1-1097) which is incorporated herein by reference. The
following information is not necessarily indicative of the financial position or
operating results that would have occurred had the transaction been consummated
on the date, or at the beginning of the periods, for which the transaction is
being given effect nor is it necessarily indicative of future operating results
or financial position.
UNAUDITED PRO FORMA RATIO OF EARNINGS TO FIXED CHARGES
Twelve Months
Ended
March 31, 1996
--------------
Unaudited Pro Forma Ratio of
Earnings to Fixed Charges 3.66
For purposes of this ratio, "Earnings" consist of the aggregate of net
income, taxes on income, investment tax credit (net) and "fixed charges." "Fixed
charges" consist of interest on long term debt, related amortization, interest
on short-term borrowings and a calculated portion of rents considered to be
interest.
See Notes to Unaudited Pro Forma Financial Statements for a description
of the assumptions used to prepare the unaudited pro forma ratio of earnings to
fixed charges.
<PAGE>
<TABLE>
Oklahoma Gas and Electric Company
Unaudited Pro Forma Balance Sheet
March 31, 1996
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
OG&E Pro Forma Pro Forma
(As Reported) Adjustments (1) OG&E
--------------- --------------- ----------------
(dollars in thousands)
<S> <C> <C> <C>
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
In service.................................... $ 3,908,070 $ (377,213) $ 3,530,857
Construction work in progress................. 30,007 (8,113) 21,894
--------------- ---------------- ----------------
Total property, plant and equipment...... 3,938,077 (385,326) 3,552,751
Less accumulated depreciation.......... 1,608,738 (108,099) 1,500,639
--------------- ---------------- ----------------
Net property, plant and equipment........ 2,329,339 (277,227) 2,052,112
--------------- ---------------- ----------------
OTHER PROPERTY AND INVESTMENTS, at cost............ 9,950 (1,922) 8,028
--------------- ---------------- ----------------
CURRENT ASSETS:
Cash and cash equivalents..................... 12,540 (12,213) 327
Accounts receivable - customers, less reserve. 111,997 (20,345) 91,652
Accrued unbilled revenues..................... 39,600 --- 39,600
Accounts receivable - other................... 9,650 4,423 14,073
Fuel inventories, at LIFO cost................ 59,447 (1,361) 58,086
Materials and supplies, at average cost....... 21,715 (4,181) 17,534
Prepayments and other......................... 6,920 (806) 6,114
Accumulated deferred tax assets............... 9,640 --- 9,640
--------------- ---------------- ----------------
Total current assets..................... 271,509 (34,483) 237,026
--------------- ---------------- ----------------
DEFERRED CHARGES:
Advance payments for gas...................... 6,500 --- 6,500
Income taxes recoverable - future rates....... 40,734 --- 40,734
Other......................................... 69,102 (13,977) 55,125
--------------- ---------------- ----------------
Total deferred charges................... 116,336 (13,977) 102,359
--------------- ---------------- ----------------
TOTAL ASSETS....................................... $ 2,727,134 $ (327,609) $ 2,399,525
=============== ================ ================
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock and retained earnings............ $ 910,551 $ (121,170) $ 789,381
Cumulative preferred stock.................... 49,939 --- 49,939
Long-term debt................................ 828,967 (120,000) 708,967
--------------- ---------------- ----------------
Total capitalization..................... 1,789,457 (241,170) 1,548,287
--------------- ---------------- ----------------
CURRENT LIABILITIES:
Short-term debt............................... 79,900 --- 79,900
Accounts payable.............................. 77,422 (17,134) 60,288
Dividends payable............................. 27,425 --- 27,425
Customers' deposits........................... 22,289 --- 22,289
Accrued taxes................................. 17,384 (743) 16,641
Accrued interest.............................. 16,590 (1,379) 15,211
Long-term debt due within one year............ 15,000 --- 15,000
Accumulated provision for rate refunds........ 2,650 --- 2,650
Other......................................... 30,047 (1,628) 28,419
--------------- ---------------- ----------------
Total current liabilities................ 288,707 (20,884) 267,823
--------------- ---------------- ----------------
DEFERRED CREDITS AND OTHER LIABILITIES:
Accrued pension and benefit obligation........ 70,893 (3,685) 67,208
Accumulated deferred income taxes............. 481,772 (58,528) 423,244
Accumulated deferred investment tax credits... 81,890 --- 81,890
Other......................................... 14,415 (3,342) 11,073
--------------- ---------------- ----------------
Total deferred credits and other
liabilities......................... 648,970 (65,555) 583,415
--------------- ---------------- ----------------
TOTAL CAPITALIZATION AND LIABILITIES............... $ 2,727,134 $ (327,609) $ 2,399,525
=============== ================ ================
</TABLE>
See accompanying notes to unaudited pro forma financial statements.
<PAGE>
<TABLE>
Oklahoma Gas and Electric Company
Unaudited Pro Forma Statements of Income and Retained Earnings
Three Months ended March 31, 1996
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
OG&E Pro Forma Pro Forma
(As Reported) Adjustments(2) OG&E
--------------- ---------------- ---------------
(thousands except per share data)
<S> <C> <C> <C>
OPERATING REVENUES:
Electric utility......................... $ 233,826 $ --- $ 233,826
Non-utility subsidiary................... 44,226 (44,226) ---
---------------- ---------------- ----------------
Total operating revenues............... 278,052 (44,226) 233,826
OPERATING EXPENSES:
Fuel .................................... 59,580 11,010 70,590
Purchased power.......................... 56,649 --- 56,649
Gas purchased for resale................. 29,287 (29,287) ---
Other operation.......................... 56,839 (10,155) 46,684
Maintenance.............................. 14,194 (619) 13,575
Depreciation and amortization............ 33,470 (5,730) 27,740
Current income taxes..................... 928 (1,178) (250)
Deferred income taxes, net............... (1,098) (916) (2,014)
Deferred investment tax credits, net..... (1,287) --- (1,287)
Taxes other than income.................. 12,273 (1,027) 11,246
---------------- ---------------- ----------------
Total operating expenses............... 260,835 (37,902) 222,933
---------------- ---------------- ----------------
OPERATING INCOME.............................. 17,217 (6,324) 10,893
---------------- ---------------- ----------------
OTHER INCOME AND DEDUCTIONS:
Interest income.......................... 511 (109) 402
Other.................................... (317) (305) (622)
---------------- ---------------- ----------------
Net other income and deductions........ 194 (414) (220)
---------------- ---------------- ----------------
INTEREST CHARGES:
Interest on long-term debt............... 15,599 (2,069) 13,530
Allowance for borrowed funds used
during construction.................... (187) --- (187)
Other.................................... 1,461 (168) 1,293
---------------- ---------------- ----------------
Total interest charges, net............ 16,873 (2,237) 14,636
---------------- ---------------- ----------------
NET INCOME (LOSS) ............................ 538 (4,501) (3,963)
PREFERRED DIVIDEND REQUIREMENTS............... 579 --- 579
---------------- ---------------- ----------------
LOSS AVAILABLE FOR COMMON..................... $ (41) $ (4,501) $ (4,542)
================ ================ ================
AVERAGE COMMON SHARES
OUTSTANDING............................... 40,371 --- 40,371
LOSS PER AVERAGE COMMON SHARE................. $ 0.00 $ (0.11) $ (0.11)
STATEMENT OF RETAINED EARNINGS
OG&E Pro Forma Pro Forma
(As Reported) Adjustments OG&E
--------------- ---------------- ----------------
BALANCE AT BEGINNING OF PERIOD................ $ 425,545 $ (120,243) $ 305,302
ADD-net income (Loss)......................... 538 (4,501) (3,963)
---------------- ---------------- ----------------
Total..................................... 426,083 (124,744) 301,339
DEDUCT:
Cash dividends declared on preferred stock.. 579 --- 579
Cash dividends declared on common stock..... 26,846 (3,574) 23,272
---------------- ---------------- ----------------
Total..................................... 27,425 (3,574) 23,851
---------------- ---------------- ----------------
BALANCE AT END OF PERIOD...................... $ 398,658 $ (121,170) $ 277,488
================ ================ ================
</TABLE>
See accompanying notes to unaudited pro forma financial statements.
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
1. Subsidiary assets, liabilities, equity and results of operations
have been eliminated from consolidated Oklahoma Gas and Electric
Company amounts to reflect the transfer of ownership and control
of the consolidated subsidiary from Oklahoma Gas and Electric
Company to OGE Energy Corp.
2. After the transaction, Oklahoma Gas and Electric Company will not
retain ownership of the subsidiary currently being consolidated.
Consequently, intercompany transactions between Oklahoma Gas and
Electric Company and its current consolidated subsidiary have not
been eliminated in the pro forma financial statements.
The most significant intercompany transactions are transmission
fees and related charges to Oklahoma Gas and Electric Company
from Enogex, its subsidiary whose core business has been to
deliver natural gas to Oklahoma Gas and Electric Company power
plants. The amount of these charges was $11.0 million for the
three months ended March 31, 1996.
Item 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.01 - Financial Data Schedule.
(b) Reports on Form 8-K - None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OKLAHOMA GAS AND ELECTRIC COMPANY
(Registrant)
By /s/ D. L. Young
---------------
D. L. Young
Controller
(On behalf of the registrant and in
his capacity as Chief Accounting Officer)
May 10, 1996
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
27.01 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from the Oklahoma
Gas and Electric Company Consolidated Statements of Income, Balance Sheets,and
Statements of Cash Flows as reported on Form 10-Q as of March 31, 1996 and is
qualified in its entirety by refernce to such Form 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,329,339
<OTHER-PROPERTY-AND-INVEST> 9,950
<TOTAL-CURRENT-ASSETS> 271,509
<TOTAL-DEFERRED-CHARGES> 116,336
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,727,134
<COMMON> 116,177
<CAPITAL-SURPLUS-PAID-IN> 395,716
<RETAINED-EARNINGS> 398,658
<TOTAL-COMMON-STOCKHOLDERS-EQ> 910,551
0
49,939
<LONG-TERM-DEBT-NET> 828,967
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 79,900
<LONG-TERM-DEBT-CURRENT-PORT> 15,000
0
<CAPITAL-LEASE-OBLIGATIONS> 9,954
<LEASES-CURRENT> 3,707
<OTHER-ITEMS-CAPITAL-AND-LIAB> 829,116
<TOT-CAPITALIZATION-AND-LIAB> 2,727,134
<GROSS-OPERATING-REVENUE> 278,052
<INCOME-TAX-EXPENSE> (1,457)
<OTHER-OPERATING-EXPENSES> 262,292
<TOTAL-OPERATING-EXPENSES> 260,835
<OPERATING-INCOME-LOSS> 17,217
<OTHER-INCOME-NET> 194
<INCOME-BEFORE-INTEREST-EXPEN> 17,411
<TOTAL-INTEREST-EXPENSE> 16,873
<NET-INCOME> 538
579
<EARNINGS-AVAILABLE-FOR-COMM> (41)
<COMMON-STOCK-DIVIDENDS> 26,845
<TOTAL-INTEREST-ON-BONDS> 15,599
<CASH-FLOW-OPERATIONS> 43,924
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
